Sawgrass Marriott seeks bankruptcy protection

The owners of the Sawgrass Marriott Golf Resort & Spa said today that its operations are continuing as normal after filing for Chapter 11 bankruptcy protection on Monday.

RQB Resort LP and RQB Development LP filed for Chapter 11 in U.S. Bankruptcy Court in Jacksonville on Monday after attempting for several months to restructure $193 million in debt with Goldman Sachs Commercial Mortgage Co.

In a press release today, Sawgrass Marriott general manager Jeff Mayers said the companies filed for bankruptcy protection because of "the current global economic environment and the fact that an agreement on a restructure with the lenders could not be reached."

"This process will protect the resort and allow us to continue to operate business as usual," he said.

The press release said there are no changes with employees and the resort is current with all vendors and suppliers.

The resort is adjacent to the TPC Sawgrass Players Stadium Course, where The Players Championship is played each May, and where Tiger Woods apologized on Feb. 19 for his marital infidelity. The complex also includes the Dye's Valley Course, which will be the site of a Nationwide Tour event, the Winn-Dixie Jacksonville Open, in October.

The 508-room hotel resort has rights to 85 percent of starting times each day to the Players Stadium Course through 2089.

TPC Sawgrass, which didn't file for bankruptcy, is the flagship facility of the PGA Tour's Tournament Players Club network. The Players Stadium Course was ranked ninth on Golf Digest's list of America's 100 Greatest Public Courses for 2009-2010.

In July 2006, Goldman Sachs helped finance the $220.5 million purchase of the 65-acre resort in Ponte Vedra Beach by RQB Resort and RQB Development.

RQB Resort is the owner of the hotel and cabana club. RQB Development is the owner of the golf villas, the spa and related development rights.

The new owners spent $30 million upgrading the resort, according to court filings. Sales rose 10 percent in the first full year. Then the economic decline reduced the number of conferences, which account for 65 percent of sales. The resort's revenue for 2009 was $42.6 million, down from $56.7 million the previous year, according to court papers.

In the third quarter of 2008, the owners announced a plan to cut costs by $4.5 million. Sales fell 25 percent in 2009, "resulting in a lack of liquidity for the resort and the inability of the debtors to pay," the company said in court papers.

Goldman, which is owed about $192.5 million as of Jan. 10, hasn't been paid since August. RQB met Goldman on March 16, 2009 and told the bankers then that they might have "liquidity issues" by August.

In June, the owners hired Perella Weinberg Partners LP to broker a solution with Goldman. In October, Goldman told the owners it wanted to foreclose.

After talks, the owners hired Jones Lang Lasalle Inc. to raise capital to help pay Goldman. The capital raising "was significantly compromised" when Goldman issued "without notice" an acceleration note on Dec. 14 and filed a foreclosure complaint in state court on or about Jan. 8, according to the filing.

Jones Lang Lasalle "has generated several qualified investors, but has not yet had an adequate time to test the market place for additional investors," court papers show.

The owners said the company may emerge from Chapter 11 "in time for the stabilization of the economy in 2011."

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